People often ask Realtors, “How’s real estate?”
For starters, real estate is pretty solid, rarely moveable, and firmly attached to the ground as it, along with the oceans, makes up the planet Earth.
And in most cases, at least for housing purposes, it’s dry. Hence the term “terra firma.”
Of course, what folks really want to know is the business status of purchasing and selling, usually in the residential side of things. Most inquiries are social niceties and conversation openers.
Others, however, may be in the truly inquisitive vein as they may want to know if it really is a good time to sell an existing home and buy a new one or finally make the leap from renting to owning their own dirt.
National stories over the past several months have painted a very dire picture of the housing industry with descriptions ranging from “severe slump” to “collapse” in both the new homes and existing homes sectors. They use “medium home prices” and “national average of” various interest rates in their compilation.
And these national surveys create an average across the country where there may well be a collapsed industry in one area but a robust business in another.
“Don’t get in the market now!” they scream.
But like politics, real estate is local, and more than that, it’s location, location, location. You don’t buy a nationally “medium priced” home with a “national average” interest rate.
The stats from the Georgia Association of Realors are in for December.
Inventory levels increased 56% year over year and media sales prices were up slightly, indicating that the sharp rise in house prices is moderating. A rise in home inventory might look like a bad thing but it is not.
This no doubt coincides with a rapid rise in mortgage interest rates last year, with those rates reaching as high as 7.25%, which are now settling into the normal 6% or so range for a 30 year fixed rate mortgage. The 2.5% to 4% rates we saw over the past couple of years were basically government subsidized and therefore artificial and simply not sustainable.
New listings decreased 15% to 8,962 but the inventory levels increase of 56% to 26,257 units absorbed that loss. This had a dampening effect on home prices as evidenced by a lower-than-inflation median sales price increase of 4% to $325,000 and average sales price increase of just 4% to $383,627.
Inflation, as you recall, was much higher at the end of the year.
These two forces — interest rate and inventory increases — worked to moderate and, in some cases, reduce the price of homes. The steep drop in lumber prices over the summer had the same effect on new construction pricing.
Make no mistake, while prices are still strong there is an equilibrium being reached between buyers and sellers resulting in good profits for the sellers and affordability for the buyers.
A recent survey found that “53% of respondents have expedited their homebuying plans based on current market conditions” and “almost half of those are willing to spend over the asking price for a property.”
That suggests a fairly strong buyer sentiment.
The Valdosta area market appears a bit tighter than the general Georgia market as median price range is somewhat lower than the state average. Current interest rates can vary between the mid-5 and mid-6% (or lower) rates.
Homes in the $275,000-$325,000 price range have a much shorter shelf life than average months’ supply and the smaller two to three acreage tracts are still difficult to find.
The Valdosta-Lowndes area market boasts resiliency and variety. As of this writing, there are 300 active listings ranging from $25,000 to $2,100,000 buyer with listings and sales happening every day.
How’s the real estate market? It’s good!
So find that agent that understands you, your needs and your market and jump in!
Gary Wisenbaker is a Realtor with Century21 Realty in Valdosta (912) 713-2553 and can be reached at gwisenbaker@C21realtyadvisors.com
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